He ended up in supply chain management, and it took me about five years to wrap my head around what it is he actually does for work. Life has come full circle — my experiences and observations regarding the legal industry have led me to where I am now: reevaluating what it is that my brother does, because I am pretty sure my firm can benefit from it.
The Association for Supply Chain Management (APICS) defines supply chain management (SCM) as “the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally.” Hmm … yes, my firm could certainly benefit from some of that, as could the entire legal industry.
Up until recently, if law firms had the words “supply chain management” floating around their offices, it was because the attorneys were advising clients in supply chain relationships and disputes. But it is time we consider the mechanism for our own businesses. The industry has slowly adopted legal project management over the last eight years. However, most firms that deploy it are implementing it for the chain’s execution, control and monitoring links and often have a hard time adapting the supply of the services within the confines of the chain if demand changes. SCM is all about optimizing operations.
SUPPLY AND DEMAND
While SCM is an important concept for the legal industry, it’s also very much outside our comfort zone because it focuses on two concepts with which we are unfamiliar — speed and efficiency. This is exactly why we need it. After all, isn’t this what our clients are demanding? By using the concepts of SCM, we can create a system to get our product — legal services — to our clients more quickly, in turn allowing us to service more clients. SCM is about developing a competitive advantage without having to lower your prices. A more efficient operational model also makes you a more reliable service provider in the eyes of your client.
Most people associate SCM with the manufacturing industry, but let’s think about how we can apply it to the legal industry. Supply chain management focuses on inputs, logistics, finished products and the optimization of the process from start to finish.
In legal, our inputs are the capital investment in the equipment and software that allow our employees to do their work, as well as the labor expended on developing relationships and retrieving and manipulating information. Our logistics are heavily technology-based — we are constantly upgrading servers and installing new software to improve the pace and efficiency of communication. In legal, our finished product is not always a physical one, but it is usually something that moves affairs forward. The real end-product is a satisfied client. The ultimate optimization goals for the legal industry are stronger relationships, more clients and improved information flow.
One thing is clear when thinking about applying this concept to law firms — it would require firms to look at their complete business strategy. This operational model cannot be set up in a vacuum because it requires all moving parts to be aligned with the overall business strategy. It’s also important to remember that we are a “supplier” of legal services in the supply chain of many of our clients. If we are not faster and more efficient, we negatively affect their supply chain — something they will seek to avoid.
If nothing else, it is a concept worth exploring. According to a survey by Deloitte from 2014, 79 percent of companies with high-performing supply chains achieve revenue growth greater than average within their industry. Conversely, only 8 percent of businesses with less capable supply chains report above-average growth.
That is enough to convince me to engage my brother in some dialogue about the consulting work he does when I see him in a few months for a family vacation to celebrate our parents’ 50th wedding anniversary. I am finally going to cash in all that brain capital I built up with him by giving him free legal advice. I look forward to brainstorming with him about “supplaw” chain management.